MUMBAI: Credit admittance to ladies has multiplied over the most recent five years. From 7% in 2017, female borrowers' loan penetration has increased to 14% in 2022. The proportion of female borrowers to the total adult population is known as credit access.
Women borrowers in India have increased at a compound annual growth rate (CAGR) of 15% over the past five years, compared to 11% for male borrowers, according to a TransUnion (TU) Cibil report. From 25% in 2017, women now account for 28% of borrowers in 2022.
There are numerous explanations for women's higher growth rate. Women borrowers have been receiving lower interest rates from numerous lenders. Second, women who borrow money have better credit scores than men. According to the report, 57% of women who borrowed money in 2022 had prime credit scores (731-770) compared to 51% of men who borrowed money.
According to the data from TU Cibil, women who borrow money are increasingly turning to consumption-based credit options like personal and consumer durable loans. According to the report, as an increasing number of women enter the workforce and achieve financial independence, they are looking for credit opportunities in order to achieve their life goals and aspirations.
Insights also show that the number of women seeking business loans has more than tripled in the last five years (from 2017 to 2022), indicating a rise in Indian startups led by women. The proportion of women in the overall portfolio of business loans has increased by 12 percentage points during this time (32% in 2022, compared to 20% in 2017). In the home loan market, the proportion of female borrowers has also increased, rising by 6 percentage points over the past five years.
Harshala Chandorkar, COO of TU Cibil, says that the government's financial inclusion mandates, which aim to increase access to financial opportunities for traditionally underserved groups like women, will benefit from the increased number of women borrowers. Chandorkar stated, "Customized products will further empower women borrowers across socioeconomic categories, age groups, and geographic locations to achieve their aspirations and economic goals."
Between 2017 and 2022, West Bengal (22%), Rajasthan (21%), and Bihar (21%), among the top 12 states by total credit active borrowers, experienced the greatest growth in the number of women borrowers.